The business behind the show

Video game industry rebounds at end of tough year

December 9, 2010 | 5:22
pm

The light at the end of the tunnel for the video game industry could well be muzzle flash from Activison's top-selling shooter game, Call of Duty: Black Ops.

The military action title set in the Cold War was the most popular game in November, selling 8.4 million units. Black Ops even outsold its well-regarded predecessor, Call of Duty: Modern Warfare 2, which rang up sales of about 6 million units in November 2009.

"Black Ops accounted for 25% of all video game software units sold in the month of November," said NPD analyst Anita Frazier. U.S. game sales rose 3% to nearly $1.5 billion in the month, she said.

That set the tone for the industry's overall performance.

Last month was the best November on record for sales of games, hardware and accessories. Total U.S. sales reached nearly $3 billion -- a gain of 8% over the prior year. That was also an improvement over two years ago, when music/dance games such as MTV's Rock Band, Activision's Guitar Hero World Tour and Nintendo's Wii Music were all the rage, Frazier said.

Hardware sales rose 2% for the month, to nearly $1.1 billion, driven by robust sales of Microsoft Corp.'s Xbox 360 console. After dramatic declines throughout 2010, Nintendo Wii console sales stabilized at 1.2 million units for the month -- roughly the same as a year ago.

"We expected a big jump in sales in November due to seasonality and the influence of the holiday," Frazier said. "But the change this November over October is bigger across most platforms than it was last November."

Console sales received a boost from aggressive price discounting on Black Friday, the first official day of the holiday shopping season.

But the Microsoft game system clearly benefitted from the popularity of the Xbox 360 Kinect, a new device that allows players to control game play with body movements, instead of key-mashing.

The Kinect was the bestselling accessory item of the month, Frazier said. Overall game accessory sales rose a dramatic 69% to $413.3 million, compared with a year ago.